Colombia should underperform Peru further

Colombia has marginally underperformed peers such as Peru and Mexico. While for Peru, the more limited exchange rate flexibility may compound adverse effects from lower commodity prices over time, the still comfortable level of net reserves and the expected increase in exports due to the boost in mining production should be mitigating factors. 

"Historical correlations between commodity prices and Peru versus Colombia 5y CDS spreads suggest that Colombia has further room to underperform", says Barclays. 

Past events of sharp swings in the relative price of copper and oil have been a driver of a repricing in the 5y CDS spread relationship between the two credits. Despite the recent copper falls, the copper/oil relationship suggests that Colombia is still too tight relative to Peru.